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USA Interactive Inc. Wednesday announced it would acquire the outstanding shares of subsidiary Expedia Inc. for US$3.3 billion, giving it full ownership of the online travel booking company. New York-based USA Interactive already owns 54 percent of Expedia’s outstanding stock.

With a war in Iraq looming ever closer, Barry Diller, chief executive officer of USA Interactive, made a point of saying in a statement that the timing of the acquisition is accidental. Buying Expedia at a time when the travel industry is reeling underscores USA Interactive’s belief in the robust growth and long-term value of online travel, he said.

“Travel may be affected by this or that event, for a day or a month or whatever, but if there is life then there is travel — we bet on the latter,” he said in the statement.

The stock-for-stock transaction has already been approved by the boards of Expedia and USA Interactive, said Andrea Riggs, an Expedia spokeswoman. The process will take four months and is expected to close in August, she said.

“This is a friendly agreement Expedia management believes will strengthen our business moving forward,” she said, adding that the acquisition is not expected to affect Expedia’s day-to-day operations.

Richard Barton, the founder, president and chief executive officer of Expedia, will resign from his post on March 31. Erik Blachford, who currently serves as president of Expedia North America, will replace him on April 1, Riggs said.

Expedia retained its financial outlook for the first quarter ending March 31. The company predicted revenue of $194 million and adjusted earnings per share of $0.25. The financial predictions do not take into account a possible war in Iraq.

Last year, USA Interactive announced its intent to acquire the portions of subsidiaries Expedia, Ticketmaster Inc. and Hotels.com Inc. that it already did not own. In an exchange offer, USA Interactive offered Expedia, Ticketmaster and Hotels.com stockholders a 7.5 percent premium over the May 31, 2002 closing price. The announcement prompted a massive sell-off by USA Interactive shareholders, causing the stock to fall nearly 13 percent. USA Interactive rescinded aits offer, saying it would not commence any exchange offers in the near future given the market’s reaction.

As part of Wednesday’s deal, Expedia shareholders will receive 1.93875 shares of USA Interactive common stock for each share of Expedia stock they own, representing a 30 percent premium based on the companies’ closing stock prices Tuesday. USA Interactive will issue close to 92.5 million basic shares and 124.9 million shares on a fully diluted, treasury method basis, the company said in a statement.